Savvy investors flock to buy item that’s ‘safe’ from Rachel Reeves | Personal Finance | Finance
As economic tensions rise worldwide, investors are increasingly turning to a tried-and-tested asset – gold.
Intensifying global inflation pressures and uncertain economic forecasts have recently led to soaring demand for the metal.
Solomon Global, a leading supplier of certified gold and silver bars and coins, reported a dramatic surge in interest last month. The company said its sales increased by a staggering 98% in January 2025 compared to the same period last year.
Paul Williams, managing director of Solomon Global, said the asset is being viewed as a “safe haven” from the country’s looming ‘stagflation’ – a combination of high inflation and low economic growth.
With the UK’s Consumer Price Index (CPI) inflation rate surging to a 10-month high of 3% in the 12 months to January, Mr Williams said concerns have been “reignited” over persistent price pressures. The Bank of England forecasts inflation to hit 3.7% in the summer after more of Chancellor Rachel Reeves’s budget measures come into effect, further reducing the purchasing power of money. The bank also halved the country’s economic growth forecast to just 0.75% this year.
Mr Williams said: “With uncertainty clouding the UK’s long-term outlook and the spectre of ‘stagflation’ looming, investors are increasingly turning to gold as a safe haven. The metal’s historical role as a hedge against inflation and economic instability is driving demand once again.”
The expert noted that Google searches for ‘buy gold’ have jumped 52% year-on-year, which could reflect growing public interest.
Rick Kanda, managing director at The Gold Bullion Company, added: “There’s no denying that 2024 was a record year for gold. It’s reached colossal new highs and broken records that none of us expected.”
He said gold’s rise in sales is largely supported by continued central bank buying and geopolitical tensions that fuel market volatility.
He noted that another factor potentially making gold a lucrative commodity to invest in is that throughout any monetary policy changes, “it’s likely gold will continue to retain its worth during uncertain times.”
He added: “Recently, Trump’s presidency and Trudeau’s resignation have contributed to an environment of increased uncertainty and market volatility, which supports the likelihood of gold being viewed as a safe-haven asset. These factors have traditionally driven investors toward gold as a reliable investment during unstable times.”
Mr Kanda forecasts that by the end of 2025, gold could reach a new milestone of $3,000 per troy ounce.
Mr Kanda said: “Overall, it looks to me that 2025 will be another extremely successful year for gold investment that’s bound to be a part of many people’s investment portfolios.”
